Weekly Trading Update
Weekly Trading Update 22.04.2022
Q1 earnings season kicks into high gear this week, including tech heavyweights like Apple. Results will need to impress to outweigh concerns around inflation and aggressive rate hikes from central banks to combat it.
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Week in Review
A post-earnings collapse in the Netflix share price was probably the stand-out market move. NFLX plummeted 35% to $21 after the streaming giant lost subscribers for the first time in a decade. Investors continue to dodge highly-valued companies, SNAP being another example, while TSLA was an exception after Tesla once again handily beating expectations.
In the FX-space USD/JPY struck a massive 20-year high, while the euro recouped some recent losses thanks to a strong debate performance from Emmanuel Macron, perhaps cementing his victory at this weekend’s French Presidential election. France go to the polls on Sunday (24th).
Chinese GDP beat expectations, but lockdowns continued, with authorities vowing to ensure logistics for import and export would be smooth. USDCNY reached a 7-month high at 6.47. Now attention is on the rising number of containerships loitering offshore Chinese ports, as a repeated concern from CEOs has been securing supplies to meet demand.
On the geopolitical front, Russia claimed to have captured Mariupol, the last Ukrainian hold-out on the Sea of Azov, securing a land bridge to Crimea.
Top 3 events for the week ahead
Worldwide GDPs
GDPs will be a focus on this week’s economic calendar, with a first look at US Q1 figures as well as from Europe.
Germany's figures in particular are likely to get a lot of attention given that the largest economy in the Eurozone reported negative growth in Q4 last year. If Germany doesn't have growth in the last quarter, it could fall into a technical recession.
The Eurozone as a whole is expected to show stronger growth. But it's worth remembering that the invasion of Ukraine didn't start until most of the quarter was over.
BOJ
Moving further East, the BOJ has its interest rate decision, where policy is broadly expected to remain unchanged.
EUR/JPY received rejection at 140.00 and could head towards 137.00 before traders get more clarity on its price action. USD/JPY could head to 130 and above, and has support at 127.50, whereas EUR/USD seems more likely to pay $1.07 a visit that holding $1.08.
Rising prices in focus
Germany also reports Inflation data next week, along with France and Australia. The US announces PCE deflator, which combined with GDP figures could give some insight into what could be expected from the Fed's meeting on May 4.
AUD/USD might lose 73c and that would bring more pain with 72c becoming the first major support.
Earnings season picks up
By the end of next week just under half of the S&P 500 names are expected to report Q1 results. Focus this week will be on the tech sector, with Apple, Meta, Alphabet and Microsoft scheduled to report.
The week closes out with oil giants Exxon, BP and Shell reporting. Other key global names expected include Roche, HSBC, and the embattled Twitter.
SP500 bulls received rejection at the 200/100 cross and the index could face further pressure towards the 4k. Otherwise, 4500 is a potential top.
Other data and events
The US reports durable goods data and trade balance. And Germany also provides Ifo Business climate. Other points include Caixin Manufacturing PMI and Swiss retail sales.
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